The Coalition Government led by John Howard has seized a historically unique political opportunity to turn Australia's century-old industrial relations system on its head. Government control of both Houses of Parliament allows it to proceed with its plans to reconstruct the way wages and conditions are set in this country. This article shows that the changes point to a much more significant shift in political and economic power than the achievement of a parliamentary majority. It is argued that the Howard government's industrial relations program represents awatershed change in the relative class power of capital over labour.